The world is cheating Afghanistan

It is a magnificent land, a high plateau, landlocked, windswept and freezing in winter, sweltering, parched and dry in summer. It has a proud people who almost reflect the tough climate; rugged, stubborn, fiercely tribal, traditionally loyal but with a tenacious mean streak if they consider themselves wronged. They sprawl across one of the ancient crossroads of civilisation but have hardly benefited and continue to live almost as poor as the dirt of the land.

This country, Afghanistan, is the real touchstone of the promises of freedom and economic development that are key claims of modern civilisation. A new report suggests world leaders - including those in the US, Europe, Japan, Russia and China - are failing to honour their promises to put Afghanistan on its feet after years of war and devastation.

Years after the Taleban was ousted, Afghanistan remains on the brink of poverty, the process of nation-building is fragile and the government depends on aid donors for more than 90 per cent of public spending. In spite of the west's heavy military commitment, the Taleban is fighting back.

Now, a report from a 95-member coalition of private relief agencies, including Caritas, Christian Aid, Islamic Relief, Oxfam and Save the Children, is damning of the Afghan aid effort. It accuses donors of reneging on promises, selling Afghanistan short, and effectively of cheating both Afghans and their own taxpayers by conniving at corruption and rip-offs.

It is worth cataloging some of the findings:

Aid to Afghanistan has fallen far short of promises; only US$15 billion of the US$25 billion has been delivered.

About 40 per cent of the aid goes back to the donor countries in corporate profits and consultants' salaries.

More than two-thirds of the aid bypasses the Afghan government.

More than half of the aid is tied, meaning it has to be spent on goods and services from the donor countries.

Profit margins on reconstruction contracts are often 20 per cent and sometimes as high as 50 per cent.

Expatriate consultants cost between US$250,000 and US$500,000 a year, in a country where government officials earn US$1,000 a year.

Aid is dwarfed by military spending: the US military alone spends US$100 million a day in Afghanistan, but total aid by all donors since 2001 comes to just US$7 million a day.

These are serious and documented charges, from which no country or agency emerges with credit. The aid shortfall comes to 30 times Afghanistan's total annual education budget. The US, the biggest donor, has disbursed only half the aid it promised.

China, which has pledged US$145 million for the period from 2002 to 2011, comes in a group, including Saudi Arabia, Turkey, the Asian Development Bank and the World Bank, which has disbursed about one-third of its commitments. Only Canada and Japan have supplied 90 per cent of the aid they promised.

In their own stubborn ways, China, the new power on the block, and the US, the self-righteous old power, deserve to be singled out.

China, clearly, has a lot to learn about international co-operation. It has given a small sum, though it's about the same as Russia with its more entrenched historic interest in Afghanistan. But when a Chinese company undertook the job of rebuilding a wing of a Kabul hospital, it insisted on using Chinese bricks, which were unsuitable. The wing collapsed, killing 13 Afghans.

US policies clearly have questionable value, apart from the overwhelming firepower concentrated on military spending - US$127 billion since 2001 - to the detriment of help for ordinary Afghans.

Afghanistan's biggest donor, USAid, allocates almost half its funds to five large US contractors in the country. Some large contracts have up to five layers of subcontractors, each of which takes 10 per cent to 20 per cent profit. A short stretch of road between Kabul and the airport contracted by USAid to the Louis Berger Group cost US$2.4 million per km, compared with US$100,000 to US$600,000 per km for normal roads, even through difficult terrain.

It was never going to be easy to bring Afghanistan into the 20th century, let alone the 21st. Although the ancient country was the centre of the old Moghul empire, it became the bone whose land was chewed over by the imperial dogs of the 19th and 20th centuries.

It is time for a new approach and greater emphasis on aid for economic development that meets the tests of the needs of the Afghan people, not the aid donors. It requires a leader who will cajole aid donors to come together and co-ordinate their efforts to meet agreed economic targets with basic standards.

If private contractors have to be used, and paid danger money and hardship pay, this should not be counted against the aid contribution. Aid donors should have to meet standards of scrutiny and transparency. Today, the Afghan government is supposed to meet 77 benchmarks, while donors face none.

The World Bank, as a part of the UN family, is probably the best co- ordinator, not least because its director in Kabul in 2006 understood the scandals and estimated that 35 per cent to 40 per cent of aid was 'badly spent ... The wastage of aid is sky-high: there is real looting going on, mainly by private enterprises'.

It is a sad commentary on US election politics that Afghanistan rarely gets mentioned, even though the failures to help the nation to its feet are undoubtedly offering great aid and comfort to Osama bin Laden, securely hidden in the mountains straddling Afghanistan and Pakistan.

Afghanistan is still the place where the modern empires of China, India, Russia, and Iran and the Middle East converge, and it is still the main home to Islamic fundamentalists who threaten to disrupt and kill whatever they declare unIslamic. The best way to isolate terrorists is to give ordinary Afghans a stake in a basic modern economy. We are falling short and betraying them.

Kevin Rafferty was managing editor of the World Bank and was previously a frequent journalist visitor to Afghanistan